A U.S. magistrate judge agrees with R-CALF USA's argument that ranchers shouldn't have to let their Beef Checkoff assessments support state beef councils if they don't agree with the council's messaging. CEO Bill Bullard believes the case could be a test for the way Beef Checkoff money is handled nationwide.
The Beef Checkoff, funded by $1-per-head fees on cattle sold in the U.S. and a similar fee on imported beef, goes toward marketing, education, research and other promotions. Half is sent to the Cattlemen's Beef Promotion and Research Fund, which is overseen by the U.S. Department of Agriculture, and half stays with qualified state beef councils.
The U.S. Supreme Court decided in a 2005 case that actions of the Cattlemen's Beef Board are government speech, and ranchers who disagree with the actions can use democratic means to influence it. But, that case did not address qualified state beef councils, like the Montana Beef Council, which are private entities.
R-CALF opposes marketing by the MBC that lumps U.S. beef with foreign beef, including advertisements for Wendy's that promote "North American beef." R-CALF sued USDA earlier in 2016 to stop producer money from going to the state council.
Chaley Harney, executive director of the Montana Beef Council, says she cannot comment on the case, but explains the goal of the council is to increase beef demand. The Beef Checkoff gets money from importers of beef - about $7 million last year - and the law that created the checkoff does not allow the council to market only U.S. beef domestically. The council's board works to promote beef in a variety of ways and has the best interests of beef producers at heart, she says.
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"All of our board members are cow-calf operators or feedlot operators or small business men and women themselves, and they are invested in it fiscally and tangibly," she says. "It's important for them to have a good consumer base for their product."
Nancy Jo Bateman, executive director of the North Dakota Beef Commission, says complaints about the way Beef Checkoff dollars are used, both nationally and locally, are not uncommon, but the goal is to promote all beef.
"As long as the Beef Checkoff program can get people headed to a restaurant or a grocery store thinking, 'I want beef tonight,' ... then they can choose which beef product will meet their desires," she says.
Bullard says independent cattlemen shouldn't have to pay for advertisements with which they disagree and over which they have no control.
U.S. Magistrate Judge John Johnston found the USDA does not have the same level of control over-qualified state beef councils as over the national campaign. Forcing ranchers to provide money for the MBC is a First Amendment violation, he found.
"Nothing in the record indicates that federal officials participate in the creation of MBC's advertising campaigns," Johnston wrote. "Likewise, there is no evidence the government approves every word of MBC's campaigns. Absent that level of control, the Court finds that it is unlikely MBC's speech is government speech."
If the USDA appeals Johnston's findings to the district court, the court will do an independent review. If it does not appeal, the court will accept Johnston's findings. The appeal is due Dec. 27, but Bullard expects an extension will be granted due to the holiday season.
The U.S. Department of Justice, which represents USDA in the case, declined to comment on the matter.
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Although there has been recent movement to allow producers to "opt out" of the checkoff by requesting that their entire assessment be sent to the Cattlemen's Beef Board, Johnston found that remedy was not good enough to overcome the First Amendment hurdle.
Harney says she cannot give out information about the number of Montana cattle producers who choose to send the entirety of their checkoff dollars to the national level. Bateman says refunds in North Dakota are on par with refunds in other commodity groups' checkoffs.
North Dakota in 2015 implemented an additional $1 per head checkoff that all stays with the state Beef Commission, and Bateman says that has been going well. The additional $1 is optional, and producers can request it be refunded. Since the program began on Aug. 1, 2015, about 7.5 percent of funds have been refunded, Bateman says.
Even though the case is far from over, Bullard was heartened by Johnston's findings.
"The broader implication will be that if it is found that Montana is operating in violation of the constitution, so are these other states," Bullard says.
